Markets

Nairobi home up for sale at Sh565 million

Set on a 10-acre estate, the Hogmead residence has now become one of the priciest units in the residential property market. COURTESY PHOTO/KNIGHT FRANK
Set on a 10-acre estate, the Hogmead residence has now become one of the priciest units in the residential property market. COURTESY PHOTO/KNIGHT FRANK 

A country house valued at $6.5 million (about Sh565 million) has been put up for sale in Nairobi’s Karen neighbourhood.

Set on a ten-acre estate, the Hogmead residence is now one of the priciest commodities in Kenya’s residential property market, confirming the growing status of Kenya as a prime real estate location in eastern Africa.

Its owners — Fuzz and Bimbi Dyer, and Andy and Caragh Roberts — had turned Hogmead into a 12-room boutique hotel whose main room cost Sh42,000 a night. The hotel, run by The Safari and Conservation Company, was indefinitely closed in October 2013 and listed with Knight Frank around the same time. The Dyers and Roberts also own and run the luxury Manda Bay resort hit by cancellations after the kidnapping of an elderly French woman in 2011.

Immediately after that incident, Mr Dyer was quoted telling the Financial Times “My business is over, completely.”

A spate of attacks by Al-Shabaab militants and travel warnings by several Western nations has buffeted the tourism industry in recent years, with reports of coastal tourism numbers down by as much as 50 per cent.

The country house on sale has six large ensuite bedrooms, six ensuite garden rooms, 12 staff rooms, a standby generator and a water treatment plant.

“It is a big property, the quality is very high-end and it overlooks the Giraffe Sanctuary,” said Ben Woodhams, managing director of Knight Frank, which is handling the listing.

The only other properties the firm has listed in or above Hogmead’s price range are two beachfront properties in Kilifi and Watamu, and a boutique hotel on Diani beach. A residential listing in Nairobi’s Loresho Ridge in the same price range is now indicated as “under offer”.

According to Knight Frank’s report on unique sales in Africa, other luxury houses up for sale in Kenya include Amina Ocean Villa in Watamu, valued at Sh304 million, and the Casa Toni in Shanzu, priced at Sh200 million. The firm has also listed some hotels among properties available for between $2 million and $5 million (Sh175 million to 438 million): They include Malindi’s Driftwood beach club and Scorpio villas.

Mr Woodhams said that the developer of Amina, the main villa under Medina Palms, had received an offer which he was considering. Coastal beaches remain a major attraction despite insecurity concerns in the area, he said.

“The prices are still high,” he said. “They were expected to soften with the insecurity issue, but they are yet to go down.” The uptake of luxurious homes indicates the growing class of the super-rich in the country who are willing to spend locally unlike in the past where they preferred stashing their money in foreign bank accounts.

The priciest property sold by Knight Frank last year fetched Sh1.6 billion. It was set on a five-acre piece of land in Kileleshwa, Nairobi. The company sold another for Sh765 million in Lower Kabete.

Mr Woodhams said that some of the buyers were looking to subdivide the land on which the property was set for commercial development.

Developers are targeting the upper end of the market, who know what they want and are quick to close transactions.

“Demand for housing is strongest at the lowest end of the market, but the financing options are almost non-existent,” Hass Consult head of marketing Sakina Hassanali said in a recent investor briefing on Kenya’s property market.

“So long as property remains a cash-only purchase, the private sector market (will continue to be) a high-end affair,” she said. The local market is also being driven by expatriates coming in to set up regional hubs for various multinationals. Institutions of global repute such as Google, General Electric, IBM and Nokia have set up offices in Nairobi.

Several luxury apartment developments are targeted at this market. For instance, 94 East Church, under construction in Westlands, will see Sh72 million units offered for sale, with penthouses priced at Sh170 million. The houses are set for completion in 18 months.

“When the middle class expanded, the upper middle class also expanded and are buying these units. It is more a class-driven issue,” said Villa Care’s managing director Daniel Ojijo.

Mr Ojijo cited three-bedroom units on an apartment on General Mathenge Road in Nairobi selling at Sh85 million each. All but three had been taken up in a matter of months.

Each of the units is serviced with its own lift. Kenya has been earmarked as one of the countries with the fastest-growing luxury spending potential as more people rise in economic class.

Data released by the Kenya Motor Industry Association (KMI) showed that new market entrants Porsche sold 27 units of its Cayenne models, priced between Sh10 million and Sh30 million, in May and June.

A recent survey by Standard Chartered Bank showed seven in 10 middle class Kenyans aspired to move to better neighbourhoods.

A report by New World Wealth showed that real assets were the largest asset class for high net worth individuals (worth more than Sh85 million) in 2013.

Investors snapped up 104 apartments belonging to the National Social Security Fund on State House Road, Nairobi in less than two weeks after they were put on sale for between Sh31-35 million.

Construction for the apartments, marked for completion in May next year, is yet to take off. The apartments, which will be set on a 3.5-acre piece of land, will also have a swimming pool, gymnasium and sauna.

NOTE: Story updated 05.08.14 to remove reference to Hogmead residence being Nairobi's priciest home after the Daily Nation reported a house in Lower Kabete has changed hands for Sh765 million.